(Bloomberg) -- Chancellor of the Exchequer Jeremy Hunt said he won’t increase the UK’s windfall tax on oil and gas companies, despite calls to do so from the opposition Labour Party after Shell Plc and BP Plc posted record profits.

“Anything higher will stop investment, increase dependence on Putin and increase energy prices,” Hunt said in the House of Commons on Tuesday, in response to a question from his Labour counterpart, Rachel Reeves. “We will be responsible.”

Prime Minister Rishi Sunak’s government introduced the windfall tax on the profits of energy giants in May last year, after months of resisting Labour’s call for one. The levy stands at 35%, and comes in addition to other charges amounting to 40% — giving an effective tax of 75% on profits.  Labour are calling for the tax to rise to the same rate as in Norway - where it’s 78% - and be backdated to the start of 2022.

Oil Giants’ $68 Billion Profits Set to Fuel UK Tax Debate

On Tuesday BP reported full-year adjusted profit of $27.65 billion, an all-time high, while Shell last week posted a record $39.87 billion profit.

Hunt is preparing to announce the UK’s budget on March 15, and on Tuesday he told the Commons that there would be no tax cuts funded by borrowing.


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